Civil Money Penalties?
You could end up paying civil money penalties ("CMPs") if you don't pay attention to Flood compliance and HMDA compliance. Tami Newett, FDIC Field Office Manager in Florida warned the bankers attending Florida Bankers Association's Compliance Institute to expect to see CMPs imposed on banks for flood hazard and HMDA problems.
CMPs will be imposed if examiners find a pattern or practice of violations of the Flood Hazard Insurance regulations. Problems that examiners find include not having insurance when insurance is required, problems with required escrowing of insurance premiums, failing to give customers notice within a reasonable time that their property is in a flood hazard area, and force placement of insurance.
With regard to HMDA violations, examiners have little discretion. When an examiner finds repeat violations of HMDA, the imposition of CMPs is mandatory. Before sending it in, check the accuracy of your LAR - carefully.
Copyright © 2002 Compliance Action. Originally appeared in Compliance Action, Vol. 7, No. 2, 3/02